2023 (9) TMI 27 - AT - Income Tax

Revision u/s 263 - period of limitation - To be calculated from the date of original assessment or from the date of re-assessment after reopening - applicability of doctrine of merger - whether period of limitation commences from the date of original assessment and not from the date of reassessment? - HELD THAT - As in the case of ICICI Bank Limited 2012 (2) TMI 308 - BOMBAY HIGH COURT wherein has held that where the jurisdiction u/s 263(1) is sought to be exercised with reference to an issue which is covered by the original order of assessment u/s 143(3) and which does not form the subject matter of the reassessment, the limitation must necessarily begin to run from the date of order passed u/s 143(3). In the instant case before us also the issue on which the ld. PCIT proposed the revision of order framed u/s 144 r.w.s. 147 dated 29.09.2021, in which these two scrips were not the subject matter of re-assessment proceedings. Therefore, the period of limitation has to run from the date of assessment as framed under section 143(1) dated 18.06.2013 i.e. from the end of financial year 31.3.2016. We incline to hold that the revisionary jurisdiction exercised by the ld. PCIT is hopelessly barred by limitation. Appeal of the assessee is allowed.

Summary

Issues Involved:
1. Exercise of revisionary jurisdiction under Section 263 of the Income Tax Act, 1961.
2. Delay in filing the appeal and its condonation.

Summary:

1. Delay in Filing the Appeal:
The assessee filed the appeal 353 days late, attributing the delay to incorrect professional advice. The Tribunal considered the provisions of Section 253(5) of the Income Tax Act, which allows condonation of delay if "sufficient cause" is shown. The Tribunal referenced several Supreme Court decisions, emphasizing a liberal interpretation of "sufficient cause" to advance substantial justice. The Tribunal found the delay excusable, as it was not deliberate or part of a dilatory strategy. Consequently, the delay was condoned, and the appeal was admitted for adjudication.

2. Exercise of Revisionary Jurisdiction under Section 263:
The assessee challenged the revisionary jurisdiction exercised by the Principal Commissioner of Income Tax (Pr. CIT) under Section 263, arguing it was beyond the limitation period specified in Section 263(2). The original assessment order under Section 143(1) was passed on 18.06.2013, and the reassessment order under Section 147 read with Section 144 was passed on 29.09.2021. The Pr. CIT revised the reassessment order on grounds unrelated to the reasons for reopening the assessment.

The Tribunal held that the Pr. CIT could only revise the original assessment order under Section 143(1), which was barred by limitation as of 31.03.2016. The Tribunal cited the Supreme Court decision in CIT vs. Alagendran Finance Limited and the Bombay High Court decision in CIT vs. ICICI Bank Limited, which established that the limitation period runs from the date of the original order if the issues revised were not part of the reassessment proceedings.

Conclusion:
The Tribunal concluded that the revisionary jurisdiction exercised by the Pr. CIT was barred by limitation. The appeal of the assessee was allowed, and the revisionary order under Section 263 was set aside.